Bank Nifty analysis – 19 May:
- The sell-side liquidity seems attractive to me.
- There has been no down move since the initial low.
- The algos may make a run for this liquidity to liquidate the intraday longs that have been built till now.
- Just an observation. It may or may not work.
Bank Nifty analysis – 19 May | Update (11:17 am):
- Let’s see the above chart in a simpler way.
- The sell-side liquidity is the stop losses of buyers. These buyers have some defined stop-loss levels, which are easy to guess.
- The algos/banks/institutions/operators (whichever entity you want to use), can assess these stop losses and will use it against you.
Bank Nifty analysis – 19 May | Update (12:00 pm):
- Played out well, more than 200 points down now.
- The counter-trend trading intraday buyers got trapped and liquidated.
- Now a similar case can be built for buy-side liquidity/short positions. However, since the HTF is heavily bearish, it’s difficult to predict the extent of the pullback.
Update (12:07 pm):
- Here’s buy-side liquidity. Clearly, there are plenty of stop losses at these points.
- The price may hit some of these levels before continuing downwards. Also, the price may not even come to these levels today and just keep falling.
- When the trend is too strong, it becomes difficult to pinpoint the pullback levels. Consider these charts as a learning aid to understand the concepts.
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